Victor Juarez v. Carolyn W. Colvin

Filing 26

ORDER by Magistrate Judge Kenly Kiya Kato: granting 20 MOTION for Attorney Fees. Fees awarded in favor of Victor Juarez against Carolyn W. Colvin in the amount of $9,880.68, 9,880.68, with a reimbursement to Plaintiff of $3,279.84 for EAJA fees previously awarded, but only to the extent that the 25% of Plaintiffs past-due benefits withheld by Defendant are available and unexhausted. (dts)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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Plaintiff,

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v.

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Case No. EDCV 14-1671-KK

VICTOR JUAREZ,

ORDER GRANTING MOTION FOR
ATTORNEY FEES PURSUANT TO
42 U.S.C. § 406(B)

CAROLYN W. COLVIN, Acting
Commissioner of Social Security,
Defendant.

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I.

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INTRODUCTION

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Plaintiff Victor Juarez (“Plaintiff’s”) counsel, William M. Kuntz

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(“Counsel”), filed a Motion for Attorney Fees Pursuant to 42 U.S.C. § 406(b)

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(“Motion”). The Motion seeks an award in the amount of $9,880.68 for

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representing Plaintiff in an action to obtain disability insurance benefits with a

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refund to Plaintiff of $3,279.84 for the Equal Access to Justice Act (“EAJA”) fees

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previously awarded.

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The parties have consented to the jurisdiction of the undersigned United

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States Magistrate Judge, pursuant to 28 U.S.C. § 636(c). For the reasons stated

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below, the Court grants the Motion.

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///

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II.

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RELEVANT BACKGROUND

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On August 21, 2014, Plaintiff filed the complaint in this action. See ECF

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Docket No. (“Dkt.”) 3, Compl. Plaintiff alleged defendant Carolyn W. Colvin

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(“Defendant”) improperly denied Plaintiff’s application for disability insurance

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benefits. Id. at 2. On February 25, 2015, the Court found Defendant erred in

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denying Plaintiff’s application, and entered Judgment reversing and remanding the

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case to Defendant for further administrative proceedings. Dkt. 17, Judgment.

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On May 4, 2015, the Court awarded Counsel EAJA fees in the amount of
$3,279.84. Dkt. 19, Order Granting EAJA Fees.
On January 3, 2017, pursuant to 42 U.S.C. § 406(b) (“Section 406(b)”),

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Counsel filed the instant Motion seeking the amount of $9,880.68 for representing

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Plaintiff in the underlying proceedings before the Court. Dkt. 20, Mot. at 1.

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Additionally, Counsel seeks an order to reimburse Plaintiff “the amount of the

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$3,279.84 for EAJA fees previously paid by the Commissioner.” Id. Counsel

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states 17 hours and 10 minutes of attorney time were expended on Plaintiff’s case,

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Itemized Hours, Dkt. 20, Ex. 4, and seeks compensation pursuant to a contingency

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fee agreement, which states Plaintiff “will pay attorney a fee equal to 25% of all past

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due benefits resulting from the favorable decision.” Contingency Fee Agreement,

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Dkt. 20, Ex. 1.

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On January 3, 2017, Plaintiff was served with the Motion and informed he

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had a right to file a response to the Motion. Dkt. 20, Mot. at 1-2, 23. Plaintiff failed

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to file a timely response. On January 18, 2017, Defendant filed a Response to

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Counsel’s Motion stating she “takes no position on the reasonableness of the

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[Motion’s] request.” Dkt. 23, Resp. at 5. Defendant did note, however, if the

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Court authorized Counsel’s fee, “Counsel must seek payment from Plaintiff if the

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agency has already released the past-due benefits to Plaintiff.” Id. Thus, the Court

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deems this matter submitted.
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III.

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DISCUSSION

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A.

APPLICABLE LAW

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Section 406(b) provides, in part:

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Whenever a court renders a judgment favorable to a claimant under

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this subchapter who was represented before the court by an attorney,

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the court may determine and allow as part of its judgment a reasonable

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fee for such representation, not in excess of 25 percent of the total of

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the past-due benefits to which the claimant is entitled by reason of

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such judgment, and the Commissioner of Social Security may . . .

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certify the amount of such fee for payment to such attorney out of, and

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not in addition to, the amount of such past-due benefits.

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42 U.S.C. § 406(b)(1)(A). Thus, “a prevailing [disability] claimant’s [attorney’s]

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fees are payable only out of the benefits recovered; in amount, such fees may not

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exceed 25 percent of past-due benefits.” Gisbrecht v. Barnhart, 535 U.S. 789, 792,

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122 S. Ct. 1817, 152 L. Ed. 2d 996 (2002).

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Where a claimant entered into a contingent fee agreement with counsel, a

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court must apply Section 406(b) “to control, not to displace, fee agreements

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between Social Security benefits claimants and their counsel.” Id. at 793. A court

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should not use a “lodestar method,” under which a district court “determines a

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reasonable fee by multiplying the reasonable hourly rate by the number of hours

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reasonably expended on the case.” Crawford v. Astrue, 586 F.3d 1142, 1148 (9th

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Cir. 2009) (en banc) (citation omitted). As the court in Crawford explained:

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[t]he lodestar method under-compensates attorneys for the risk they

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assume in representing [social security] claimants and ordinarily

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produces remarkably smaller fees than would be produced by starting

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with the contingent-fee agreement. A district court’s use of the

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lodestar to determine a reasonable fee thus ultimately works to the
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disadvantage of [social security] claimants who need counsel to

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recover any past-due benefits at all.

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Crawford, 586 F.3d at 1149.

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Furthermore, where the claimant and counsel entered into a lawful contingent fee

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agreement, courts that use the “lodestar” method as the starting point to

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determine the reasonableness of fees requested under Section 406(b) improperly

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“reject the primacy of lawful attorney-client fee agreements.” Gisbrecht, 535 U.S.

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at 793.
However, even in contingency fee cases, a court has “an affirmative duty to

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assure that the reasonableness of the fee [asserted by counsel] is established.”

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Crawford, 586 F.3d at 1149. The court must examine “whether the amount need

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be reduced, not whether the lodestar amount should be enhanced.” Id. The court

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may consider factors such as the character of the representation, the results

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achieved, the ratio between the amount of any benefits awarded and the time

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expended, and any undue delay attributable to counsel that caused an accumulation

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of back benefits in determining whether a lawful contingent fee agreement is

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reasonable. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 1151.

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B.

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ANALYSIS
Here, Counsel seeks a reasonable fee under Section 406(b). Plaintiff

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retained Counsel to represent him in federal court in his appeal from the

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administrative denial of benefits, and agreed to pay Counsel a contingency fee of

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twenty-five percent of any past due benefits obtained. See Contingency Fee

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Agreement, Dkt. 20, Ex. 1. Consideration of the factors set forth in Gisbrecht and

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Crawford warrants no reduction of the fee Counsel seeks.

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The record discloses no issue regarding the quality or efficiency of Counsel’s

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representation before this Court, or any misconduct or delay by Counsel. Counsel

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obtained a favorable outcome for Plaintiff, ultimately resulting in a remand for

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further administrative proceedings and an award of past due benefits. See Dkt. 17,
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Judgment; Notice of Award, Dkt. 20, Ex. 3. Further, the 17 hours and 10 minutes

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expended to litigate this case was reasonable and within the approved range for

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social security disability cases. See Patterson v. Apfel, 99 F. Supp. 2d 1212, 1214 &

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n.2 (C.D. Cal. 2000) (noting that “a survey of several dozen cases in which

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attorney’s fees were awarded in social security cases suggests that the 33.75 hours

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spent by plaintiff’s counsel falls within the approved range”).

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In addition, a fee of $9,880.68 based on 17 hours and 10 minutes of attorney

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time is reasonable. See Itemized Hours, Dkt. 20, Ex. 4. The Court finds Counsel’s

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effective hourly rate of approximately $575.46 reasonable under the circumstances.

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See Villa v. Astrue, 2010 WL 118454, at *1-2 (E.D. Cal. Jan. 7, 2010) (approving

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Section 406(b) fees exceeding $1,000.00 per hour, and noting “[r]educing

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[Section] 406(b) fees after Crawford is a dicey business”). Further, post-Gisbrecht

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decisions have approved contingent fee agreements yielding hourly rates greater

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than the rate Counsel seeks. E.g., Daniel v. Astrue, 2009 WL 1941632, at *2-3

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(C.D. Cal. July 2, 2009) (approving fees amounting to $1,491.25 per hour). Hence,

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in light of the hours Counsel expended, the Section 406(b) fee award amount

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Counsel requests does not represent an unfair windfall to Counsel.

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Finally, nothing in the record suggests any overreaching in the making of the

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fee agreement or any impropriety on the part of Counsel in representing Plaintiff.

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Counsel assumed the risk of nonpayment inherent in a contingency agreement and

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Counsel’s efforts proved successful for Plaintiff. Accordingly, the Court finds the

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Section 406(b) fees Counsel requests reasonable.

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IV.

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ORDER

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Based on the foregoing, IT IS HEREBY ORDERED: (1) Counsel’s Motion

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for Attorney Fees Pursuant to 42 U.S.C. § 406(b) is GRANTED; and (2)

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Defendant is directed to pay Counsel the sum of $9,880.68, with a reimbursement

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to Plaintiff of $3,279.84 for EAJA fees previously awarded, but only to the extent
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that the 25% of Plaintiff’s past-due benefits withheld by Defendant are available and

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unexhausted.

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Dated: January 26, 2017
HONORABLE KENLY KIYA KATO
United States Magistrate Judge

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